By Jack Limpert
If it’s mid-September and you’re the editor, you can expect an email from accounting asking each department head (editorial, production, advertising, circulation, etc.) to come up with a proposed budget for next year. You then analyze editorial spending in the current year, talk to staff about how the magazine can get better, and come up with budget numbers that you think will let you improve the editorial side of the magazine without drawing too much laughter from the numbers people.
The publisher, working with accounting, then combines all the budget proposals into a magazine budget for the next year—subject to what will be negotiated by each department head at the annual budget meeting in November.
At that budget meeting, which pretty well locks you in to what you can do next year, I found that the essential argument was short-term vs. long-term thinking. The numbers people tend to think short-term: Can we cut the edit ratio of pages from 46 to 44 percent, saving $150,000 in editorial and production costs? Why do we need $5,000 a month for editorial and art kill fees? Do we have to pay for subscriptions to all these magazines and newspapers? The editor argues long-term: Good stories and good design keeps the subscriber renewal rate up high; if the editorial product weakens and the renewal rate drops by five percent, we’ll have to spend a lot of money on direct mail to keep the circulation numbers where they are now. You make the case that smart investment in editorial quality is a big long-term payoff. I sometimes used what I thought of as the watering the soup argument: A restaurant has a reputation for very good food and it has lots of loyal customers and repeat business. Then the restaurant manager tells the chef: We could save $100,000 a year if we didn’t put so much expensive crab in the crab soup. We could cut it back by just a little and diners won’t notice. The restaurant then does that for a couple of years and customers begin to think: The food here is just okay. Let’s try another restaurant next time. Once you lose customers by watering the soup, it’s hard to get them back.
You do have to keep in mind that at any annual budget meeting there are going to be cuts—the numbers people figure it’s their job to do some trimming and they aren’t going to finish the day without thinking we brought spending down enough that we can sleep well tonight. What seemed to make them feel the best was cutting editorial entertainment and editorial travel—why should those people have so much fun? If you leave room to cut in those areas, it’s a way for everyone to leave smiling and optimistic about next year.
Coming up in Editors at Work: The one number that makes or breaks your career as an editor.
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